Automakers and the Canadian government have reached an agreement requiring reduced greenhouse gas emissions from all cars sold in the country in an effort to combat global warming.
The voluntary pact, disclosed Wednesday to Parliament by John Efford, Canada's natural resources minister, comes after senior Canadian officials threatened to copy a landmark California law that seeks to force automakers to cut emissions of carbon dioxide and other heat-trapping gases.
Automakers are challenging the law in court, arguing that California is trying to set fuel standards for the entire United States and that only the federal government has that authority.
Canada's auto market is about the same size as California's, and each is responsible for about 1% of global greenhouse gas emissions.
Canada's agreement requires automakers by 2010 to cut tailpipe emissions by 5.3 million tons, about what would be achieved by improving the fuel efficiency of all cars sold in Canada by 25%. But the pact does not specify that fuel economy be improved to meet the target.
If the companies fail to comply with the voluntary agreement, Canada plans to follow up with a legally binding regulation, officials said.
The agreement is "good for Canadians and it's good for the auto industry," Efford told the House of Commons in Ottawa.
Canadian officials said privately that automakers had demanded that the pact stipulate a reduction in tons of greenhouse gases instead of an improvement in fuel economy, as Canada initially sought.
The companies feared that an agreement to make cars in Canada more fuel-efficient would have made it harder to resist calls to do the same thing in the United States, the Canadian officials said.
Canada is bound under the recently enacted Kyoto Protocol to reduce its overall greenhouse gas emissions to about 6% below 1990 levels by 2012. But emissions in Canada have increased by nearly 20% since 1990, prompting the nation's leaders to take aggressive steps to cut the exhaust.
Canadian officials visited California to learn more about the state's law after the author of the California law, state Assemblywoman Fran Pavley (D-Agoura Hills), visited Canada.
Conservationists say Canada's voluntary agreement, combined with California's law, could have a significant effect on global warming, because they probably will lead automakers to make reduced-emissions vehicles for all of North America.
Automakers began working to reduce emissions in Europe after reaching a similar voluntary agreement with the European Union. However, they have argued that making such reductions to the U.S. vehicle fleet, which is larger and thirstier because of the popularity of sport utility vehicles and other larger cars, would be too costly.
Environmental groups praised the Canadian pact, saying it would make it difficult for automakers to continue saying they cannot make similar reductions in the United States.
"They continue arguing with a straight face that this can't be done, even while they are doing it in Europe," said Daniel Becker, director of the Sierra Club's global warming program. "When they go into court and say, 'Your honor, we can't do this,' we can now point out that they have agreed to do this just north of us in Canada."
A spokeswoman for the Alliance of Automobile Manufacturers, the trade group that filed suit against California, countered that the Canadian agreement would have no bearing on the industry's lawsuit. She noted that the suit was based on whether the state was unlawfully attempting to set a new national fuel economy requirement.
"Clearly, states cannot set fuel economy standards," said the spokeswoman, Gloria Bergquist. "So it is apples and oranges."